Fresenius Medical Care, the world’s leading provider of products and services for people with chronic kidney failure, will offer the Seraph 100 Microbind Affinity Blood Filter from ExThera Medical Corporation in several European countries as of now. Both companies have signed a co-marketing and distribution agreement, effective in January 2021 and covering Belgium, Denmark, France, Germany, Italy, Luxembourg, the Netherlands, Norway, Sweden and the United Kingdom.
ExThera Medical’s Seraph 100 adsorber is used in critical care for the extracorporeal removal of pathogens from the bloodstream and can be operated with Fresenius Medical Care acute dialysis machines. Similar to the dialysis process, the blood is purified by pumping it through the filter. The Seraph 100 has been CE-certified since 2019 for the reduction of pathogens during bloodstream infections, in addition to therapy with anti-infectives.
“With the innovative adsorber technology from ExThera Medical, we are strengthening our offering in the field of critical care solutions, which is one of the key areas of the company’s strategy 2025,” said Dr Katarzyna Mazur-Hofsäß, Fresenius Medical Care’s CEO for Europe, Middle East and Africa. “Bloodstream infections often lead to kidney, lung or multiorgan failure. A treatment with the Seraph 100 can eliminate more than 90 percent of the pathogens in the patient’s blood for every pass through the filter. And the first treatment results of its use with COVID-19 patients are very promising.”
“We are very excited to partner with Fresenius Medical Care to broaden European availability of the Seraph 100,” said Bob Ward, Founder and CEO of ExThera Medical. “This distribution agreement ensures as many patients as possible will have access to a therapy that can help critically ill patients suffering from pathogen-oriented bloodstream infection.”
Fresenius Medical Care Ventures, the venture capital unit of Fresenius Medical Care, has a financial stake in ExThera Medical since 2016.
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to various factors, including, but not limited to, changes in business, economic and competitive conditions, legal changes, regulatory approvals, results of clinical studies, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
Fresenius Medical Care has improved in this year's ranking of the non-profit organization CDP (formerly "Carbon Disclosure Project"). In both the 'Climate' and 'Water' areas, Fresenius Medical Care improved to category B and B-, respectively. With the ranking in the second highest category B, Fresenius Medical Care is one of the leading companies in the health care sector. Companies in categories A and B are characterized by transparency, coordinated climate and water protection measures, and the implementation of corresponding best-practice approaches. CDP is one of the most renowned climate and environmental rankings in the capital market. More than 515 investors use the annual results to evaluate climate protection activities and climate-related risks and opportunities of the companies assessed.
Melanie Schmitt of Fresenius Medical Care in Schweinfurt is Germany’s best apprentice in the category “Electronics Technician for Information and Systems Technology.” This annual award from the Association of German Chambers of Industry and Commerce was based on her outstanding examination results at the end of a three-and-a-half-year training period. Schmitt, 20, was also honored for the best vocational qualification in the State of Bavaria and the Main-Franconia region.
Between September 2016 and February 2020, Schmitt trained in various departments in production and in research and development at Fresenius Medical Care’s facility in Schweinfurt. She learned to develop and program electronic switches and other hardware and software components. The Schweinfurt resident is now working in the software and systems verification department of the Global Research and Development division.
“If I do something, then I like to do it right,” Schmitt said, explaining her outstanding results to the small group gathered for the award presentation at the Schweinfurt plant. An annual ceremony is normally held in Berlin to honor all the apprentice winners from across Germany, but it had to be canceled this year due to the pandemic.
“As the local chamber, state and federal winner, Melanie Schmitt accomplished a gigantic feat,” said Jürgen Bode, Deputy Director of the Würzburg-Schweinfurt Chamber of Industry and Commerce, who presented the award. “This required good cooperation between the apprentice and the company providing the training. My thanks to Fresenius Medical Care, who have accomplished this superbly.”
Christian Hepp, head of industrial training at Fresenius Medical Care in Schweinfurt, said: “Quality in training is very important to us. We are really delighted, along with Melanie Schmitt, about this special award. And we are honored that she has decided on a future with us.”
During industrial and commercial training at Fresenius Medical Care in Schweinfurt, apprentices, trainees and students in dual-study programs work on various projects together with engineers and other experts. Assignments have a specific practical application, and there are few purely academic exercises.
Opened in 1979, the Schweinfurt facility is Fresenius Medical Care’s most important research and production facility for dialysis machines and other medical devices. The company currently has more than 1,300 employees at the site, about a third of them in research and development.
Fresenius Medical Care, the world’s leading provider of products and services for people with chronic kidney failure, has been recognized for the 11th time as a sustainability leader with inclusion in the Dow Jones Sustainability Index (DJSI Europe). The DJSI Europe index represents the top 20 percent of the largest 600 European companies in the S&P Global BMI, based on the international investment company S&P Global’s analysis of their economic, environmental and social performance.
- Operations maintained despite COVID-19, impact on patients minimized
- Q3 development impacted by currency headwinds and expected lower reimbursement for calcimimetics
- Financial targets for FY 2020 confirmed inclusive of anticipated COVID-19 effects
“The global COVID-19 pandemic has posed further challenges to us in the third quarter; and it will be a sizable challenge to be managed also in the months to come”, said Rice Powell, Chief Executive Officer of Fresenius Medical Care. “It is at times like these that the value of our strong network, of our vertically integrated, resilient business model and of the commitment of our entire Fresenius Medical Care team becomes evident – and proves to be decisive for fostering the wellbeing of our patients as well as creating value for our shareholders. On the back of our strong earnings development in the first nine months, we confirm our outlook for the financial year 2020. Thanks to the lessons learned from the first phase of the pandemic and our highly committed team, I am very confident that our company will successfully cope with COVID-19.”
2020 targets confirmed: mid to high single digit growth rates
Fresenius Medical Care continues to expect both revenue and net income1 to grow at a mid to high single digit rate in 2020. These targets are inclusive of anticipated COVID-19 effects, in constant currency and exclude special items3. They are based on the adjusted results 2019, including the effects of the operations of the NxStage acquisition and the IFRS 16 implementation.
1 Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA
2 For a reconciliation of adjusted figures, please refer to the table at the end of the press release
3 Special items are effects that are unusual in nature and have not been foreseeable or not foreseeable in size or impact at the time of giving guidance.
COVID-19 continues to affect dialysis business
As in previous months – and thanks to the comprehensive protective measures initiated at the beginning of the pandemic – Fresenius Medical Care was able to minimize the impact on patients and to maintain operations in its more than 4,000 dialysis centers worldwide without significant interruptions.
However, the COVID-19 pandemic continued to affect people with advanced kidney disease and the resulting severity of illness generated an increase in hospitalization and mortality rate. The resulting increase in missed treatments and, in addition, delayed referrals of patients with late stage chronic kidney disease, slowed down the organic growth in the third quarter to 3%. In the first nine months the COVID-19 related net effect on operating income was neutral.
Patients, Clinics and Employees
As of September 30, 2020, Fresenius Medical Care treated 349,167 patients in 4,073 dialysis clinics worldwide. At the end of the third quarter, the Company had 126,463 employees (full-time equivalents) worldwide, compared to 120,734 employees as of September 30, 2019.
Solid net income growth despite headwinds from exchange rates
Despite a sizable headwind from exchange rates, revenue was stable and amounted to EUR 4,414 million (+6% at constant currency). Organic growth of 3% was realized including the expected negative impacts from lower reimbursement for calcimimetics and COVID-19 related slower growth in the number of treatments.
Health Care Services revenue remained stable despite the negative effects from exchange rates and amounted to EUR 3,499 million (+6% at constant currency). On a constant currency basis, growth was driven by negative prior year revenue effects (“prior year revenue effects”4) , contributions from acquisitions and was achieved despite the lower reimbursement for calcimimetics as well as COVID-19 related slower growth of the number of treatments.
4 Prior year revenue effects: revenue recognition adjustment for accounts receivable in legal dispute (- EUR 84 million), reduction in patient attribution and a decreasing savings rate for ESCOs (- EUR 46 million)
Health Care Products revenue was negatively impacted by exchange rates as well and decreased by 1% to EUR 915 million (+4% at constant currency). On a constant currency basis, growth was driven by higher sales of products for acute care treatments, machines for chronic treatment and peritoneal dialysis products.
In the first nine months of 2020 revenue increased by 4% to EUR 13,459 million (+6% at constant currency), with organic growth of 4%. Health Care Services revenue grew by 4% to EUR 10,708 million (+6% at constant currency). Health Care Products revenue rose by 5% to EUR 2,751 million (+7% at constant currency).
Operating income increased by 6% to EUR 632 million (+11% at constant currency), resulting in a margin of 14.3% (Q3 2019: 13.5%). The margin increase was driven by negative prior year earnings effects (“prior year earnings effects”5) , an increase in commercial revenue and favorable cost management of pharmaceuticals, offsetting the lower reimbursement for calcimimetics, all in the North America region.
Operating income for the first nine months increased by 11% to EUR 1,843 million (+12% at constant currency), resulting in a margin of 13.7% (9M 2019: 12.8%).
5 Prior year earnings effects: revenue recognition adjustment for accounts receivable in legal dispute (- EUR 84 million), reduction in patient attribution and a decreasing savings rate for ESCOs (- EUR 46 million) as well as a remeasurement effect of the fair value of the Humacyte investment (EUR 76 million).
Net income1 grew by 6% to EUR 354 million (+11% at constant currency), driven by the earnings effects described above and lower refinancing cost in light of favorable market conditions. Basic earnings per share (EPS) rose by 9% to EUR 1.21 (+14% at constant currency), supported by the Company’s completed share buyback program decreasing the average weighted number of shares outstanding.
In the first nine months of 2020, net income increased by 15% to EUR 987 million (+15% at constant currency). EPS rose by 19% to EUR 3.35 (+19% at constant currency).
Exceptional cash-flow development in the first nine months
Fresenius Medical Care generated EUR 746 million of operating cash flow (Q3 2019: EUR 868 million), resulting in a margin of 16.9% (Q3 2019: 19.7%). For the first nine months of 2020, operating cash flow increased to EUR 3,649 million (9M 2019: EUR 1,796 million). This increase was mainly due to U.S. federal relief funding and advanced payments under the CARES Act, other COVID-19 relief, as well as working capital improvements driven by cash collections.
Free cash flow (net cash used in operating activities, after capital expenditures, before acquisitions, investments and dividends) amounted to EUR 507 million (Q3 2019: EUR 584 million), resulting in a margin of 11.5% (Q3 2019: 13.2%). In the first nine months of 2020, the Company generated a free cash flow of EUR 2,913 million (9M 2019: EUR 1,019 million).
Regional developments
In North America, despite a sizable negative exchange rate effect, revenue remained stable and amounted to EUR 3,069 million (+5% at constant currency, +2% organic). On a constant currency basis, growth drivers were the prior year revenue effects4, an improved commercial mix and contributions from acquisitions. This was partially offset by expected headwinds from lower reimbursement for calcimimetics as well as a COVID-19 related slower growth of the number of treatments. For the first nine months, North America revenue increased by 5% to EUR 9,495 million (+5% at constant currency, +3% organic).
Despite significant headwinds from exchange rates, operating income increased by 8% to EUR 514 million (+13% at constant currency), resulting in a margin of 16.8% (Q3 2019: 15.5%). The margin increase was mainly due to the prior year earnings effects5, an increase in commercial revenue and favorable cost management of pharmaceuticals, offsetting the lower reimbursement for calcimimetics. For the first nine months, operating income rose by 24% to EUR 1,587 million (+24% at constant currency), resulting in a margin of 16.7% (9M 2019: 14.2%).
Despite a negative effect from exchange rates, revenue in EMEA remained stable and amounted to EUR 682 million (+3% at constant currency, +1% organic). Growth on a constant currency basis was supported by contributions from acquisitions and growth in same market treatments. For the first nine months, EMEA revenue increased by 3% to EUR 2,048 million (+5% at constant currency, +4% organic).
Operating income for the EMEA region also remained stable and amounted to EUR 99 million (+0% at constant currency), resulting in a margin of 14.6% (Q3 2019: 14.6%). At constant currency, operating income development was negatively influenced by unfavorable impact from foreign currency transaction effects. For the first nine months, operating income decreased by 17% to EUR 278 million (-16% at constant currency), resulting in a margin of 13.6% (9M 2019: 16.8%). The decrease was mainly due to the reduction of a contingent consideration liability related to Xenios in the prior year and an impairment of a license held by the joint venture with Vifor based on an unfavorable clinical trial.
In Asia-Pacific, revenue development was affected by exchange rates and increased by 2% to EUR 484 million (+6% at constant currency, +6 organic), mainly driven by growth in same market treatments, contributions from acquisitions, higher sales of in-center disposables and products for acute care treatments, as well as organic growth in the Care Coordination business. This was partially offset by missing contributions from closed or sold clinics. For the first nine months, revenue grew by 1% to EUR 1,377 million (+2% at constant currency, +2% organic).
Operating income grew by 7% to EUR 97 million (+9% at constant currency), resulting in a margin of 20.0% (Q3 2019: 19.0%). The increase in margin was supported by a favorable impact from cost management initiatives and business growth. For the first nine months, operating income decreased by 7% to EUR 237 million (-7% at constant currency) resulting in a margin of 17.2% (9M 2019: 18.7%).
Including a very significant headwind from exchange rates, Latin America revenue decreased by 7% to EUR 170 million (+22% at constant currency, +17% organic). For the first nine months, revenue decreased by 2% to EUR 508 million (+23% at constant currency, +17% organic).
Operating income increased by 6% to EUR 11 million (+28% at constant currency), resulting in a margin of 6.6% (Q3 2019: 5.8%). For the first nine months, operating income grew by 4% to EUR 29 million (+18% at constant currency), resulting in a margin of 5.7% (9M 2019: 5.4%).
Conference call
Fresenius Medical Care will host a conference call to discuss the results of the third quarter and first nine months of 2020 on October 29, 2020 at 3:30 p.m. CET / 10:30 a.m. ET. Details will be available on the company’s website www.freseniusmedicalcare.com in the “Investors” section. A replay will be available shortly after the call.
Please refer to our statement of earnings included in the separate PDF-files for a complete overview of the results for the third quarter and first nine months of 2020. Our 6-K disclosure provides more details.
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to various factors, including, but not limited to, changes in business, economic and competitive conditions, legal changes, regulatory approvals, impacts related to the COVID-19 pandemic results of clinical studies, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
Fresenius Medical Care North America announced today that the U.S. Food and Drug Administration (FDA) has approved DELFLEX® peritoneal dialysis solutions in Biofine®, an innovative bag material. The milestone marks another important step in the company’s commitment to grow home dialysis through new and improved products. Biofine material generates less waste and is PVC-free, to the benefit of the environment. The new Biofine peritoneal dialysis solutions bag has a user-friendly design for easy storage and use, and will be produced on a new manufacturing line in the company’s Knoxville, Tennessee plant. It is expected to be made available first to a limited number of U.S. patients this fall.
Fresenius Medical Care, the world’s leading provider of products and services for people with chronic kidney failure, is excellently positioned for continued, sustainable growth. At today’s virtual-only Capital Markets Day, management presented the company’s new growth strategy and a new medium-term outlook for the coming five years to analysts and investors.
Fresenius Medical Care aims to much more closely mesh, over the entire path of the illness, the still highly fragmented treatments provided to chronic and critical kidney disease patients. For this purpose, the company will leverage even more effectively its core competencies in the innovation of products, operating outpatient facilities, standardizing medical procedures and efficiently coordinating patients.
The new strategy embraces three major areas. The first area, the Renal Care Continuum, puts dialysis products and services at its core and is enhanced by four components:
New renal care models: Using digital technologies such as artificial intelligence and the capability to analyze huge amounts of data, Fresenius Medical Care is working to develop new forms of renal therapy. These include, for example, personalized medicine or holistic home care.
Value-based care: Drawing on its comprehensive experience in disease management, the company will push forward with the transition from a fee-for-service payment model to pay-for-performance models, in order to offer care that is even better and is also sustainably affordable.
Chronic kidney disease and transplantation: Fresenius Medical Care’s offerings in the area of value-based care models will be expanded beyond dialysis to the treatment of chronic kidney disease as well as an active role in the area of kidney transplantation.
Renal care innovations: The company will continue to advance its development of renal care innovations and invest in start-ups and early-stage companies in the healthcare sector.
The second area is Critical care solutions. Fresenius Medical Care will extend its critical care portfolio to other extracorporeal intensive care therapy areas, such as the treatment of heart, lung and multi-organ failure.
The third area is Complementary assets. To leverage its existing network and create an additional basis for future growth, the company will further expand its network of complementary assets through partnerships, investments and acquisitions.
The new strategy is embedded in the company’s Global Sustainability Program, which was launched last year. This program is under the direct responsibility of the Chief Executive Officer, and Management Board compensation will be oriented to it.
Together with the new strategy, Fresenius Medical Care is announcing a new medium-term outlook through 2025. During the next five years, in constant currency and excluding special items, the company expects annual average increases in the mid-single-digit percentage range for revenue and in the upper-single-digit percentage range for net income.
Rice Powell, Chief Executive Officer of Fresenius Medical Care, said during the opening of the Capital Markets Day: “The new strategy is our next logical step. It’s the next step up from our four core competencies, it’s a step up for our network – and it’s a step in our quest for even more valuable solutions for our patients as well as for payors and health care systems around the world.”
Presentations and other information material given at the Capital Markets Day will be available soon at: www.freseniusmedicalcare.com/en/investors/events-presentations/capital-markets-day/
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to various factors, including, but not limited to, changes in business, economic and competitive conditions, legal changes, regulatory approvals, results of clinical studies, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.
Fresenius Medical Care North America announced a partnership with Livongo, the leading Applied Health Signals company in the U.S. This will enable the company to better deliver targeted, real-time care coordination services to patients with late-stage chronic kidney disease (CKD) under value based care agreements with insurance providers and the federal government, as well as manage their comorbidities such as diabetes and hypertension. By deploying innovative technologies and services, the partnership allows patients to receive personalized interventions including remote monitoring, biometrics, education, nutrition, weight management, and emotional support, with the goal to improve outcomes, slow progression of CKD, and reduce the overall cost of care. With earlier intervention, the company also seeks to increase optimal dialysis starts, as well as offer earlier evaluation of transplantation and home dialysis options.
Fresenius Medical Care North America and the health insurer Humana are broadening their collaboration. The goal is improved, better coordinated and more holistic care for eligible members, for example through expanded access to CKD care coordination services and transitional care units. In addition, the existing clinical network contract, which provides eligible members with access to dialysis at more than 2,600 Fresenius Kidney Care clinics, is being implemented as a value-based payment model. This means that reimbursement will be based on meeting agreed quality improvement and patient outcome goals.
Fresenius Medical Care, the world’s leading provider of products and services for people with chronic kidney failure, today announced publication of its 2020 Global Annual Medical Report. Titled “The Power of Ideas: Ingenuity, Optimism, and the Future of Global Healthcare,” it advances the worldwide conversation about the continuing evolution of healthcare and underlines the role Fresenius Medical Care can play in transforming care for chronically ill patients.
“This year’s report focuses on the ideas, ingenuity and optimism that are transforming healthcare,” said Franklin W. Maddux, MD, Global Chief Medical Officer of Fresenius Medical Care. “We look at ways to enhance patient choice, new frontiers in connected health, the promise of artificial intelligence, and other important topics including our global response to COVID-19. Our 2020 report also shows the remarkable diversity of people behind the ideas that are helping us evolve our healthcare systems to recognize the unique lifetime journey of each kidney disease patient.”
The 2020 Global Annual Medical Report comprises 24 chapters by nearly 40 authors from across the company, representing some of Fresenius Medical Care’s best thought leadership on a wide range of topics. These also include precision medicine and genomics, cardioprotective dialysis, value-based care, and transplantation.
Some of the key chapters include:
- Building on Lessons Learned: Activating a Global Pandemic Master Plan
- The Aspirational Role of Artificial Intelligence and Advanced Analytics
- The Power of Precision: Genomics Medicine and Power of Personalization of Kidney Care
- Cardioprotective Dialysis: Improving Cardiovascular Health Through More Personalized Treatment
- Driving Sustainability and Creating Value for Patients in Global Healthcare
- Increasing Access to Transplantation: Lessons from the United States
- Clinical Performance Supports Organized Value-Based Care
- Social Care and Medical Care Become Kidney Care
The 2020 Global Annual Medical Report is published by the Global Medical Office of Fresenius Medical Care. The full report is now available online at:
https://www.freseniusmedicalcare.com/en/about-us/sustainability/medical-responsibility/
Disclaimer
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to various factors, including, but not limited to, changes in business, economic and competitive conditions, legal changes, regulatory approvals, results of clinical studies, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. KGaA's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA does not undertake any responsibility to update the forward-looking statements in this release.